I remember checking like a year ago and they still had the word "gorilla" blacklisted (i.e. it never returns anything even if you have gorilla images).
Humans, unfortunately, are offended if you imply they look like gorillas.
What's a good fix? Human sensitivity is arbitrary, so the fix is going to tend to be arbitrary too.
If the algorithm doesn't work well they have problems to solve.
The internet is surely full of racist photos that could teach the algorithm. The algorithm could also have bugs that miss-categorize the data.
The real problem is that those building and managing the algorithm don't fully know how it works or, more importantly, what it had learned. If they did the algorithm would be fixed without a term blocklist.